Infosys (NYSE:INFY) Announces Earnings Results

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

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 Down 6.6%

Shares of NYSE:INFY opened at $12.34 on Friday. Infosys has a 12 month low of $10.12 and a 12 month high of $30.00. The company’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 cap of $49.99 billion, a P/E ratio of 15.24, a P/E/G ratio of 2.88 and a beta of 0.88.

Analyst Ratings Changes

A number of equities research analysts recently weighed in on the company. Jefferies Financial Group reissued a “hold” rating and set a $14.31 target price (down from $20.82) on shares of Infosys in a research report on Monday, August 31st. Weiss Ratings lowered shares of Infosys from a “hold (c-)” rating to a “sell (d+)” rating in a report on Tuesday, July 28th. HSBC set a $11.47 target price on shares of Infosys and gave the stock a “hold” rating in a research report on Friday, July 24th. TD Cowen reissued a “hold” rating and set a $9.00 price target (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 shares of Infosys and gave the company a “hold” rating in a report on Thursday, July 16th. Ten equities research analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock currently has an average rating of “Reduce” and an average target price of $11.45.

Infosys News Roundup

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

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.