Infosys Misses Q3 Profit Projections, But Remains on Growth Path
Systems integrator Infosys reported overall encouraging results for its financial third quarter ended December 31, despite missing analyst forecasts.
The software services giant reported constant-currency revenue growth at 8.5-9%, compared with 6-8% in the previous quarter. This is due largely to a number of big deal wins achieved during the quarter, showing signs of a turnaround since its new Chief Executive Officer Salil Parekh took over a year ago. In the last three quarters, Infosys secured deals worth over 1.5 billion each, and renewed growth in its financial services business.
Revenue from financial services customers grew 32.5% in constant currency, consistent with the pace of growth over the past four quarters. The financial services segment grew roughly 3% quarter-on-quarter in Q3, indicating that the SI’s mission to promote its cloud computing, automation and analytics expertise has been winning it some favour with financials. Coincidentally, digital services grew as a percentage of overall revenue, to 31.5%.
It’s not all good news for the embattled SI, however. Profit margin fell to its lowest in at least 10 quarters in the three months to December. That was partly because it accounted for depreciation at its controversy-laden subsidiaries Skava and Panaya. However, the margin remained within the stated guidance of 22-24%.