Infosys: Industry leading revenue growth in Q1 lays robust foundation for the year

Infosys

2022/7/25 10:49

PR97161

BENGALURU, India, July 24, 2022 /PRNewswire=KYODO JBN/ --

- FY 23 Revenue guidance increased to 14%-16%.

- Margin guidance retained at 21%-23%

Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in

next-generation digital services and consulting, delivered a robust performance

in Q1 with year-on-year growth at 21.4% and sequential growth at 5.5% in

constant currency. Year on year growth was in double digits across all business

segments in constant currency terms. Digital accounted for 61.0% of overall

revenues, growing at 37.5% in constant currency. Net hiring was strong at

21,171. Operating margin for the quarter was 20.0%, with Free Cash Flow

conversion at 95.2% of net profit.

"Our strong overall performance in Q1 amidst an uncertain economic

environment is a testament to our innate resilience as an organization, our

industry-leading digital capabilities and continued client-relevance. We

continue to gain market share and see a significant pipeline driven by our

Cobalt cloud capabilities and differentiated digital value proposition," said

Salil Parekh, CEO and MD. "We are investing in rapid talent expansion while

ensuring rewarding careers for our employees, to better serve evolving market

opportunities. This has resulted in a strong performance in Q1 and increase in

FY 23 revenue guidance to 14%-16%," he added.

37.5% YoY	21.4% YoY 5.5% QoQ	20.0 %	4.4% YoY	$1.7 bn
CC Digital growth	CC Revenue growth	Operating margin ($ terms)	Increase in EPS (INR terms)	Large deal TCV

1. Key highlights for the quarter ended June 30, 2022

- Revenues in CC terms grew by 21.4% YoY and 5.5% QoQ

- Reported revenues at $4,444 million, growth of 17.5% YoY

- Digital revenues at 61.0% of total revenues, YoY CC growth of 37.5%

- Operating margin at 20.0%, decline of 3.7% YoY and decline of 1.5% QoQ

- Basic EPS at $0.16, decline of 1.1% YoY

- FCF at $656 million; FCF conversion at 95.2% of net profit

"We are fueling the strong growth momentum with strategic investments in

talent through hiring and competitive compensation revisions. While this will

impact margins in the immediate term, it is expected to reduce attrition levels

and position us well for future growth. We continue to optimize various cost

levers to drive efficiency in operations," said Nilanjan Roy, Chief Financial

Officer. "Continued high focus on cash led to strong FCF to net profit

conversion at 95.2% and improvement in ROE to 31.0%," he added.

2. Client Wins & Testimonials

- Infosys and Rolls-Royce extended their strategic collaboration with the

launch of a joint 'Aerospace Engineering and Digital Innovation Centre' in

Bengaluru, India. Speaking about the new centre, Kishore Jayaraman, President –

India and South Asia, Rolls-Royce, said, "Our strategic partnership with

Infosys presents an exciting opportunity for both companies to leverage

combined strengths in engineering and digital innovation to accelerate growth

in the civil aerospace market. Given the aerospace sector is poised for revival

and growth in India and across the world, this joint innovation centre will

strengthen Rolls-Royce's global engineering ecosystem and position us well for

the future."

- Infosys launched the Infosys Cobalt Financial Services Cloud, an industry

cloud platform for enterprises across the financial services industry to

accelerate business value in the cloud. Dave Cosgrove, Global Head of

Settlements & Middle Office, MarketAxess, said, "MarketAxess is leveraging the

Infosys Cobalt Financial Services Cloud platform for reconciliation as a

service on cloud. This is helping us scale the reconciliation process on-demand

while improving accuracy and transparency. Leveraging the reconciliation

service on Infosys Cobalt Financial Services Cloud enabled us to go-live

quickly without significant capex investments and ongoing maintenance thereby,

bringing the power of cloud agility and usage-based pricing model to a critical

business process."

- Infosys and Google Cloud have been selected by Backcountry to help them

deliver seamless and secure digital experiences for outdoor enthusiasts. Vismay

Thakkar, VP of Technology, Backcountry, said, "As we enter the Spring season

and our customers embark on more outdoor adventures, we anticipate heightened

demand for our products, which is why we're opening new brick-and-mortar stores

to meet their needs in any format. Infosys offers the necessary skills and

resources to deliver a secure and seamless customer experience, virtually or

in-person, which is why our collaboration is proving to be so powerful."

- Infosys collaborated with TK Elevator to revamp their digital workplace

management, network security, and IT infrastructure, powered by Infosys Cobalt.

Susan Poon, Global CIO at TK Elevator, said, "At TK Elevator, IT infrastructure

is the core of our digital initiatives, and we continuously strive to provide

state-of-the-art user services. With Infosys as a strategic partner, we are

confident to achieve our target of automation, innovation, and efficiency

across the IT landscape."

- EisnerAmper, one of the largest accounting, tax, and business advisory

firms in the U.S., selected RISE with SAP. Sanjay Desai, CTO EisnerAmper said,

"Infosys is implementing a flexible and scalable solution like SAP S/4HANA

Public Cloud to help EisnerAmper meet their growth ambitions over the coming

years."

3. Recognitions

- Recognized among Kantar's global 100 most valuable brands in 2022

- Ranked highest in Stakeholders Empowerment Services' (SES) 'ESG Scores -

Top 100 Listed Companies in India' report

- Recognized as the '2021 Global AI Services Company of the Year' by Frost

& Sullivan

- Awarded HFS OneOffice™ Award in the Sustainability category

- Awarded HFS OneOffice™ Award in the Innovation Ecosystem category

- Recognized as 'GSI Innovation Partner of the Year 2022' at Snowflake

Summit

- Winner of the 2022 Microsoft Security Modern Endpoint Management Partner

of the Year Award

- Positioned as a leader in the 2022 Gartner® Magic Quadrant™ for SAP

S/4HANA Application Services, Worldwide

- Positioned as a leader in the 2022 Gartner® Magic Quadrant™ for Oracle

Cloud Applications Services, Worldwide

- Infosys BPM positioned as a leader in the 2022 Gartner® Magic Quadrant™

for Finance and Accounting Business Process Outsourcing

- Ranked as a leader in Everest - Healthcare Payer Digital Services Peak

Matrix Assessment

- Recognized as a leader in Everest - Oracle Cloud Applications (OCA)

Services PEAK Matrix® Assessment for Europe

- Recognized as a leader in Everest - Sustainability Enablement Technology

Services PEAK Matrix® Assessment

- Recognized as a leader in ISG Provider Lens™ ServiceNow Ecosystem

Partners in U.S. and Australia 2022 Quadrant Report

- Ranked as a leader in the IDC MarketScape Worldwide Cloud Professional

Services Vendor Assessment

- Ranked as a leader in the IDC MarketScape Worldwide Intelligent

Automation Services Vendor Assessment

- Positioned as a leader in the IDC MarketScape Worldwide SAP

Implementation Services 2022 Vendor Assessment

- Positioned as a leader in Avasant's Salesforce Services 2022 RadarView™

- Positioned as a leader in Avasant's Internet of Things Services 2022

RadarView™

- Ranked as a leader in Avasant's Cybersecurity Services 2022 RadarView™

- Positioned as a leader in Avasant's Applied AI and Advanced Analytics

Services 2022 RadarView™

- EdgeVerve adjudicated as an Innovator in the Computer Vision Category at

the 2022 NASSCOM AI Game Changer Award

- EdgeVerve awarded the Gold GLOBEE Awards for Disruptor Company of the

Year in Automation and Productivity

- Infosys BPM Winners in the International Project of the Year category

with Telefonica UK, at the Global Sourcing Association (GSA) UK Awards 2022

- Infosys BPM announced as a winner in the Telecommunications Project of

the Year category with BT-EE, at the Global Sourcing Association (GSA) UK

Awards 2022

About Infosys

Infosys is a global leader in next-generation digital services and

consulting. Over 300,000 of our people work to amplify human potential and

create the next opportunity for people, businesses and communities. With over

four decades of experience in managing the systems and workings of global

enterprises, we expertly steer clients, in more than 50 countries, as they

navigate their digital transformation powered by the cloud. We enable them with

an AI-powered core, empower the business with agile digital at scale and drive

continuous improvement with always-on learning through the transfer of digital

skills, expertise, and ideas from our innovation ecosystem. We are deeply

committed to being a well-governed, environmentally sustainable organization

where diverse talent thrives in an inclusive workplace.

Visit www.infosys.com to see how Infosys (NSE: INFY) (BSE: INFY) (NYSE:

INFY) can help your enterprise navigate your next.

Safe Harbor

This Release contains 'forward-looking statements' within the meaning of

Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),

and Section 21E of the Securities Exchange Act of 1934, as amended (the

"Exchange Act"), that involve substantial risks and uncertainties.

Forward-looking statements generally relate to future events or our future

financial or operating performance and that are based on our current

expectations, assumptions, estimates and projections about the Company, our

industry, economic conditions in the markets in which we operate, and certain

other matters. Generally, these forward-looking statements can be identified by

the use of forward-looking terminology such as 'may', 'anticipate', 'believe',

'estimate', 'expect', 'continue', 'intend', 'will', 'project', 'seek', 'could',

'would', 'should' and similar expressions. Those statements include, among

other things, statements regarding our business strategy, our expectations

concerning our market position, future operations, growth, margins,

profitability, attrition, liquidity, and capital resources, our ESG vision, our

capital allocation policy, the effects of COVID-19 on global economic

conditions and our business and operations, wage increases, change in the

regulations including immigration regulation and policies in the United States.

These statements are subject to known and unknown risks, uncertainties and

other factors which may cause actual results or outcomes to differ materially

from those implied by the forward-looking statements. Additional risks that

could affect our future operating results are more fully described in our

United States Securities and Exchange Commission filings including our Annual

Report on Form 20-F for the fiscal year ended March 31, 2022. These filings are

available at www.sec.gov . Infosys may, from time to time, make additional

written and oral forward-looking statements, including statements contained in

the Company's filings with the Securities and Exchange Commission and our

reports to shareholders. The Company does not undertake to update any

forward-looking statements that may be made from time to time by or on behalf

of the Company unless it is required by law.

TABLE 1:

Infosys Limited and subsidiaries
Extracted from the Condensed Consolidated Balance Sheet under IFRS as at: (Dollars in millions)

	June 30, 2022	March 31, 2022
ASSETS
Current assets
Cash and cash equivalents	1,771	2,305
Current investments	1,027	880
Trade receivables	2,917	2,995
Unbilled revenue	1,709	1,526
Other Current assets	1,258	1,159
Total current assets	8,682	8,865
Non-current assets
Property, plant and equipment and Right-of-use assets	2,377	2,429
Goodwill and other Intangible assets	1,030	1,042
Non-current investments	1,664	1,801
Unbilled revenue	150	124
Other non-current assets	1,290	1,294
Total non-current assets	6,511	6,690
Total assets	15,193	15,555
LIABILITIES AND EQUITY
Current liabilities
Trade payables	501	545
Unearned revenue	800	834
Employee benefit obligations	282	288
Other current liabilities and provisions	3,060	2,766
Total current liabilities	4,643	4,433
Non-current liabilities
Lease liabilities	655	607
Other non-current liabilities	508	521
Total non-current liabilities	1,163	1,128
Total liabilities	5,806	5,561
Total equity attributable to equity holders of the company	9,337	9,941
Non-controlling interests	50	53
Total equity	9,387	9,994
Total liabilities and equity	15,193	15,555
Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for:
(Dollars in millions except per equity share data)

	3 months ended June 30, 2022	3 months ended June 30, 2021
Revenues	4,444	3,782
Cost of sales	3,144	2,509
Gross profit	1,300	1,273
Operating expenses:
Selling and marketing expenses	193	169
Administrative expenses	219	208
Total operating expenses	412	377
Operating profit	888	896
Other income, net (3)	80	77
Profit before income taxes	968	973
Income tax expense	279	268
Net profit (before minority interest)	689	705
Net profit (after minority interest)	689	704
Basic EPS ($)	0.16	0.17
Diluted EPS ($)	0.16	0.17