Infosys Cuts Fiscal 2027 Growth Outlook To 1%-2% Despite $5.2 Billion In Large Deals
The IT services company kept its 20%-22% margin guidance and booked a mega deal of over $2 billion in the second quarter.
Infosys, the Bengaluru-based consulting and technology services company, revised its fiscal 2027 revenue growth guidance to 1%-2% in constant currency on Friday, as it reported second-quarter revenue of $5,145 million. Its U.S.-listed shares fell 5.07% to $12.55 in Friday trading, from a prior close of $13.22.
Growth guide revised, margin held
Infosys kept its fiscal 2027 operating margin guidance at 20%-22%. Second-quarter revenue grew 1.5% from a year earlier and 1.2% from the prior quarter in constant currency, the company said. Reported revenue rose 1.3% to $5,145 million, and operating margin held at 21.0%.
For the first six months of the fiscal year, constant-currency revenue grew 1.9% and reported revenue rose 2.1% to $10,227 million.
Basic earnings per share were $0.20, down 0.3% from a year earlier. An Associated Press earnings snapshot built on Zacks Investment Research data said that missed a three-analyst average estimate of 21 cents. Free cash flow was $928 million, down 15.7% from a year earlier, and equal to 113.3% of net profit.
A mega deal and AI at 10.5%
Large-deal contract value totaled $5.2 billion, 62% of it net new, including a mega deal of over $2 billion. AI revenue made up 10.5% of the total and grew 29% from the prior quarter.
"Our AI revenue was at 10.5% and grew 29% quarter-on-quarter," CEO Salil Parekh said in the release. He said the company is advising some of the largest global enterprises on AI strategy.
The release also listed client wins, including a ten-year agreement with Crocs and work for Mondelez International, Telia and Investec.
Dividend and market value
CFO Jayesh Sanghrajka said margins held steady because of cost and operational efficiency measures while the company kept making required investments. The board announced an interim dividend of ₹26 per share, up 13% from last year.
Infosys has a market value of $53.5 billion across all its shares, as of Friday's session.
The shares fell 5.07% on the day the company lowered its growth outlook and held its margin range.
Sources
- Form 6-K — IFRS USD PRESS RELEASE — SEC EDGAR
- Infosys: Fiscal Q2 Earnings Snapshot — Associated Press
- Infosys GAAP EPS of $0.20 misses by $0.01, revenue of $5.14B misses by $40M (NYSE:INFY) | Seeking Alpha — seekingalpha.com
- Infosys Q2 EPS $0.20 Misses $0.21 Estimate, S... — benzinga.com
- Infosys:Differentiated AI strategy and a sharp focus on value unlock propels 29% sequential growth in AI revenues — prnewswire.com
- Infosys:Differentiated AI strategy and a sharp focus on value unlock propels 29% sequential growth in AI revenues — prnewswire.com
