Infosys (NYSE: INFY) Announces Results for the Quarter ended December 31, 2015
Author(s): City Air NewsFinancial Highlights: Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2015 Quarter ended December 31, 2015 • Revenues were $ 2,407 million for the...
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Jan 14, 2016 12:30
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Financial Highlights:
Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2015
Quarter ended December 31, 2015
• Revenues were $ 2,407 million for the quarter ended December 31, 2015 QoQ growth was 0.6% in reported terms; 1.1% in constant currency terms YoY growth was 8.5% in reported terms; 12.5% in constant currency terms
• Operating profit was $ 599 million for the quarter ended December 31, 2015 QoQ growth was (1.8%) YoY growth was 1.2%
• Net profit was $ 524 million for the quarter ended December 31, 2015 QoQ growth was 0.9% YoY growth was 0.4%
• Earnings per share (EPS) was $ 0.23 for the quarter ended December 31, 2015 QoQ growth was 0.9% YoY growth was 0.4%
• Liquid assets including cash and cash equivalents, available-for-sale financial assets and government bonds were $4,765 million as on December 31, 2015 as compared to $4,894 million as on September 30, 2015
"We are starting to see creative confidence blossoming within Infosys - David Kelley's beautiful idea that innovation is not specific to one department but is an ability within all of us, waiting to unleash our full creative potential. We are seeing Infoscions becoming innovators, bringing innovation and client value to each individual project. This confidence can only come from a culture of learning and empowerment, and this is the kind of company we are endeavoring to create," said Dr. Vishal Sikka, CEO and MD. "Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth."
“The healthy volume growth this quarter has been encouraging. The lesser working days and our investments into additional trainees resulted in softer pricing and utilization for the quarter.” said U B Pravin Rao, President & COO. “Our continued focus on employee engagement is paying dividends resulting in lower attrition. We continue to simplify our policies and enable greater agility within the company, with the goal of boosting our productivity.”
“We have been able to navigate the quarter, better than our earlier expectations”, said M.D. Ranganath, CFO. “We will continue to focus on enhancing operational efficiency through multiple levers in the coming quarters.”
Outlook*
The Company’s outlook (consolidated) for the fiscal year ending March 31, 2016, under IFRS is as follows:
• Revenue guidance increased to 12.8%-13.2% in constant currency;
• Revenue guidance increased to 8.9%-9.3% in USD terms based on the exchange rates as of Dec 31st, 2015*
*Conversion: AUD/USD – 0.73; Euro/USD – 1.09; GBP/USD – 1.48
Investments and Acquisitions
• Completed the acquisition of Noah Consulting, LLC, a leading provider of advanced information management consulting services for the oil and gas industry.
• Invested in WHOOP, an early stage company that offers a performance optimization system for elite professional sports teams, and invested in CloudEndure, a startup that provides Cloud Migration and Cloud-based Disaster Recovery (DR) software.
Business Highlights
We continue to see a great opportunity to rethink the notion of services – bringing the best of human potential together with software and platforms, to drive the digital transformation of the world around us.
Investing in Artificial Intelligence
In December, we announced our participation in OpenAI, a non-profit organization dedicated to developing and advancing Artificial Intelligence, bringing the best AI talent in the world together in the interest of all of us. This initiative adds an important new dimension to our ongoing efforts in AI.
Increasing the Depth of Client Relationships
In Q3, we strengthened relationships with key clients, including renewing existing large scale contracts, opening new accounts and signing four large deals.
• ALSTOM, a global leader in rail transport, selected us for next-generation services in application engineering, development and maintenance, in addition to product lifecycle management to reduce IT costs, improve user experience, and increase the efficiency of the product design process.
• MRJ90, the flagship aircraft of the Mitsubishi Aircraft Corporation, Japan (MITAC) recently completed its maiden test flight. We helped MITAC in the mechanical design of fuselage structures, delivered continuous improvements through automation, and reduced both the cost and cycle time.
• Mercedes Benz Research and Development Center, India, has partnered with us to run their complete datacenter and network operations support in 15 countries across the APAC region, increasing agility and automation and reducing cost of operations.
Delivering Grassroots Innovation through Zero Distance
Zero Distance, our program to drive innovation in every project, empowering all employees to be innovators, continued to grow in Q3. By the end of Q3, 90% of our delivery organization had done something innovative in an existing project, beyond the statement of work. As recognized in many client surveys the innovation quotient of the organization has improved and zero distance has been recognized in employee surveys as the most impactful and engaging movement in the company.
Matthew Pegge, Head of Service Delivery, TNT, said, "In the 12 months since we partnered with Infosys, they have consistently met or exceeded expectations. A seamless transition of over 721 applications in our complex application landscape, delivered by Infosys across 8 countries through more than 5500 SME sessions has helped establish a solid foundation for the partnership. Then as part of their Zero Distance initiative, Infosys pro-actively identified numerous opportunities to deliver additional value to TNT. For example, the non-invasive automation created for monitoring our mainframe based messaging app is enabling earlier detection and automated resolution of incidents – thus giving higher business stability. There are a number of additional developments in progress based around creating an ‘interactive visibility dashboard’ which will provide the business with greater insight to enable them to drive further service improvements and operational efficiencies. We are confident that our partnership with Infosys will help us deliver even more value for our business.”
Driving Innovation through Aikido Service Offerings
We are seeing continued adoption of our Aikido service offerings across all industries, as clients look to us to help renew their IT landscapes non-disruptively (Ki); leverage new platforms and technologies to open new opportunities (Ai); and bring the power of Design Thinking to find the great problems to solve (D?).
• DNB Bank of Norway selected us to transform their application landscape. Applying AiKiDo, we will leverage knowledge-based non-disruptive renewal to evolve DNB Bank’s entire data cluster, data warehousing services, regulatory reporting, and ERP functions. We will improve efficiencies in IT operations and data processing, and apply Design Thinking to development initiatives in the bank’s data cluster.
• Commerzbank chose us for a multi-year application management program to develop a post trade utility for the bank, leveraging principles of Design Thinking and the AiKiDo framework to simplify application architecture, standardize and improve processes, and drive cost efficiency.
Infosys Information Platform (IIP) surpassed 200 engagements to date, with 30 in production.
• Murray Swartzberg, Sr. VP IT and Digital Media, ATP, said, “We’re delighted with the technology leadership that Infosys has brought to our partnership. What Infosys demonstrated at the Barclays World Tour finals using their open data analytics platform - Infosys Information Platform (IIP) – made tennis so much more exciting for our fans and sport. Analyzing such huge volumes of data to find the right insights that helped deliver in-time foresight into the game was a first for ATP. We look forward to developing many such exciting initiatives, along with Infosys, to help reimagine the experience of tennis for us all.”
Infosys Automation Platform (IAP) surpassed 121 engagements with 47 in production.
• Eric Keimes, Operations Team Manager (Selling & Ordering), Proximus said, “IAP helped us to automate bulk processing of data over multiple complex platforms in the ordering domain eg: Oracle, Unix, different GUI’s. This has helped us reduce significant effort, it has also helped us perform massive corrections in cases of production issues in a shorter time compared to traditional scripting. We have realized a saving of €1 million with no additional cost to Proximus. It has helped us in better servicing towards our customers, improving our KPI’s and resolution timeliness. I appreciate the Infosys team to have come up with this idea and collaborating with Proximus to have it implemented.”
Panaya, Skava & Edge software products continue to see strong adoption.
• BNSF Railway, a leading North American freight railroad, leveraged Infosys Panaya’s deep impact analysis capabilities to adopt risk-based testing, automated test evidence capture and test acceleration during weekly releases for its mission-critical SAP platform.
• Skava is seeing strong traction with clients across geographies, with a record Black Friday holiday weekend– traffic and m-commerce sales through the platform were up by 50% from last year.
• The EdgeVerve business sustained momentum with 24 wins and 25 go-lives for both the Finacle and Edge suite of solutions across various markets.
We have had more than 151 Design Thinking engagements with clients to date, and more than 69,000 employees have been trained in Design Thinking.
• Jan-Pieter Lips, President, International Coalitions, Aimia, said, “Infosys helped Aimia with a market strategy and roadmap leveraging Design Thinking. It was a powerful and effective method to bring convergent thinking across our cross functional team in just three days. The approach helped Aimia to evaluate the core needs of a market and its consumers and helped open the minds of our team to think of creative solutions rather than pushing predetermined ideas. We look forward to leveraging this methodology in other initiatives.”
Awards and Recognition
• Awarded the ‘Corporate Citizen of the Year Award’ at the Economic Times (ET) Awards 2015.
• Positioned as a Leader in Gartner’s November 2015 MQ for Application Testing Services Worldwide.*
• Inducted into the ‘Winner’s Circle’ in the HfS Research IoT Services Blueprint Report 2015.
• Named one of the most relevant brands for digital strategy in Everest Group survey.
• Named as a Leader by IDC in its Worldwide PLM Strategic Consulting 2015 report
• Finacle Mobile Banking solution named a leader by Forrester Research, Inc. in ‘The Forrester Wave™: Mobile Banking Solutions, Q4 2015’ report.
*Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Board Changes
On January 14, 2016, the Board appointed Dr. Punita Kumar Sinha as an Independent Director with immediate effect
Ms. Carol M. Browner resigned as Member of the Board effective November 23, 2015. The Board placed on record its deep sense of appreciation for the services rendered by her during her tenure as a Director
The Board recommended the reappointment of Prof. Jeffrey S. Lehman, Independent Director of the Company for a term of two years with effect from April 14, 2016 to hold office upto April 13, 2018, and not be liable to retire by rotation. Prof. Lehman’s current term of office as an Independent Director expires on April 13, 2016. The appointment is subject to the approval of the shareholder
Beyond Business
For this fiscal, Infosys has pledged `270 crore towards Corporate Social Responsibility (CSR) that is primarily being carried out through the Infosys Foundation, its philanthropic arm.
In Q3, continuing on its mission, Infosys Foundation USA awarded several new grants that broaden access to Computer Science Education and coding across all US public schools so that students – especially women and those belonging to under-represented minorities – have equal access to acquire the digital skills needed by the workforce of tomorrow. To celebrate the Computer Science Education Week 2015, the Foundation awarded five new grants to non-profits across America and hosted 10+ computer science boot camps.
Date:
Thursday, January 14, 2016
