Infosys INFY, a leader in next-generation digital services and consulting worldwide, delivered a strong third-quarter fiscal 2025 performance with earnings of 19 cents per share, matching the Zacks Consensus Estimate. The bottom line improved 5.6% from the year-ago quarter’s earnings of 18 cents.

In the trailing four quarters, INFY’s earnings beat the Zacks Consensus Estimate once and matched thrice, with an average surprise of 8.8%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Infosys’ fiscal third-quarter revenues increased 5.9% to $4.94 billion from the year-ago quarter’s revenues of $4.66 billion. The top line surpassed the Zacks Consensus Estimate of $4.88 billion. Key strategic initiatives, market positioning, remarkable growth across segments and unique digital offerings were the company's main drivers of the top line. 

Buoyed by strong third-quarter performance, Infosys raised its guidance for fiscal 2025. Impressive quarterly results, along with upbeat fiscal 2025 guidance, are likely to give a fresh boost to INFY’s share price and gain investors' confidence.

Over the past year, shares of INFY have gained 8.8% compared with the Computers - IT Services industry’s appreciation of 10.8%.

Infosys Limited Price, Consensus and EPS Surprise

Infosys Limited price-consensus-eps-surprise-chart | Infosys Limited Quote

Infosys’ Q3 Details

Revenues across North America recorded year-over-year growth of 4.9% on a reported basis. Revenues across India and Europe registered growth of 38.3% and 11.9%, respectively, while the Rest of the World decreased 11.7% on a reported basis. On a constant currency (cc) basis, North America grew 4.8%. On a cc basis, India and Europe registered growth of 40.1% and 12.2%, respectively, while the Rest of the World decreased 11.1%.

Segment-wise, revenues from Manufacturing increased 10% to $765.5 million, Financial Services revenues grew 5.8% to $1.37 billion and Energy, Utilities, Resources & Services sales climbed 8.6% to $666.8 million. Communication rose 4.4% to $553.2 million, and Hi-Tech division sales increased 8.5% to $390.2 million.

In the third quarter of fiscal 2025, the company’s Retail segment revenues increased 0.1% to $681.6 million. Life Sciences revenues increased 6.5% to $375.4 million. The Others business unit’s revenues decreased 1.3% to $133.4 million.

Infosys added 101 clients in the fiscal third quarter. It signed 17 large deals of contract values worth $2.5 billion. The company reported that its clients, worth more than $100 million, now add up to 41, up from 40 in the year-ago quarter.

Gross profits increased 7.6% year over year to approximately $1.5 billion. The gross margin expanded 50 basis points (bps) on a year-over-year basis to 30.3%. The company’s operating income increased 10.1% year over year to $1.05 billion. Meanwhile, the operating margin expanded 80 bps to 21.3% year over year.

INFY’s Balance Sheet and Cash Flow Details

Infosys ended the fiscal third quarter with consolidated cash and investments of $4.65 billion, up from $4.63 billion recorded in the previous quarter. During the fiscal third quarter, the company generated a free cash flow of $1.26 billion.

INFY Raises Guidance for FY25

Buoyed by the strong fiscal third-quarter performance, Infosys raised its revenue guidance for fiscal 2025. The company now projects full-fiscal revenues to grow 4.5-5.0% on a cc basis, up from the earlier guidance of 3.75-4.50%. Moreover, it expects a fiscal 2025 operating margin in the range of 20-22%.

Zacks Rank & Stocks to Consider

Currently, INFY carries a Zacks Rank #4 (Sell).

Garmin GRMN, Planet Labs PBC PL, and Stem STEM are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. GRMN and PL sport a Zacks Rank #1 (Strong Buy) each, while STEM carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

GRMN shares have rallied 72.6% for the past year. The Zacks Consensus Estimate for GRMN’s full-year 2025 earnings is pegged at $7.66 per share, unchanged over the past 30 days, suggesting an increase of 9.3% from the year-ago quarter’s reported figure.

PL shares have surged 84.1% in the past year. The Zacks Consensus Estimate for PL’s full-year fiscal 2025 loss has contracted to 15 cents from the year-ago quarter’s loss of 50 cents, indicating growth of 70%

STEM shares have declined 74.6% over the past year. The Zacks Consensus Estimate for STEM’s full-year 2025 loss figure is pegged at 49 cents per share, implying a growth of 5.3% from the year-ago quarter’s loss of 52 cents.

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