Infosys achieves record-breaking Q1 FY25 results – Cash flow and deal wins soar

Infosys (NSE, BSE, NYSE: INFY), a global leader in next-generation digital services and consulting, has reported its Q1 FY25 results, showcasing robust performance across various metrics. The company achieved $4,714 million in Q1 revenues, reflecting a sequential growth of 3.6% and a year-on-year growth of 2.5% in constant currency.

Operating margin expanded by 1% sequentially, reaching 21.1%. Notably, Infosys recorded its highest-ever free cash flow at $1,094 million, a remarkable 56.5% increase year-over-year. The number of large deal wins also hit a record high of 34, with a total contract value (TCV) of $4.1 billion, 57.6% of which were net new.

Infosys reported that revenues in constant currency terms grew by 2.5% year-over-year and 3.6% quarter-over-quarter. Reported revenues stood at ₹39,315 crore, marking a 3.6% year-over-year growth. The operating margin was 21.1%, showing a 0.3% year-over-year and 1.0% quarter-over-quarter increase. Basic earnings per share (EPS) was ₹15.38, up 7.0% year-over-year. Free cash flow (FCF) amounted to ₹9,155 crore, growing by 59.2% year-over-year, with FCF conversion at 143.6% of net profit.

Salil Parekh, CEO and Managing Director, highlighted the company’s strong start to FY25, driven by broad-based growth, margin expansion, and robust deal wins. He attributed this success to Infosys’ differentiated service offerings, client trust, and relentless execution. Parekh also emphasized the company’s focused approach to generative AI for enterprises, leveraging their Topaz and Cobalt capabilities.

Jayesh Sanghrajka, Chief Financial Officer, noted that Infosys’ cost optimization efforts through Project Maximus led to a 1.0% growth in operating margin in Q1. He also mentioned the highest-ever FCF generation at $1.1 billion and an increase in return on equity (ROE) to 33.6% due to higher investor payouts.

Infosys completed the acquisition of in-tech, a leading Engineering R&D services provider focused on the German automotive industry. In-tech, headquartered in Germany, develops solutions in e-mobility, connected and autonomous driving, electric vehicles, and other sectors.

This acquisition brings Infosys marquee German original equipment manufacturers, deep client relationships, and an extensive industry expertise with a multidisciplinary team of 2,200 people across locations in Germany, Austria, China, the UK, and nearshore locations in the Czech Republic, Romania, Spain, and India.

Infosys announced several significant collaborations, including a multi-year partnership with Telstra to accelerate its software engineering and IT transformation journey. Infosys launched Infosys Aster, a set of AI-amplified marketing services, and established a Testing Center of Excellence with La-Z-Boy.

The company also entered into a strategic three-year partnership with the ABB FIA Formula E World Championship and a multi-year collaboration with First Abu Dhabi Bank (FAB) to optimize its IT infrastructure services.

Infosys extended its collaboration with Posti to enhance customer experience and operational efficiency using Infosys Topaz. The company worked with Proximus to revamp their ServiceNow platform leveraging Infosys Cobalt, and successfully completed the technology landscape separation program for Team Global Express.

Additionally, Infosys collaborated with Commerzbank to consolidate their trading ecosystem on a unified Murex platform.

Infosys’ strong performance in Q1 FY25 reflects its strategic focus on innovation, cost optimization, and expanding its client base. The company’s record deal wins and cash flow generation highlight its robust market position and ability to deliver value to clients. The acquisition of in-tech and strategic collaborations further enhance Infosys’ capabilities in digital transformation and AI-driven solutions, positioning it well for future growth.