Infosys earnings Q3 2010 – Metrics, Facts & Learnings
DATE: Jan 11, 2010
Infosys earnings looks like a positive harbinger for IT offshoring vendors and a positive turn in the markets.
FACTS
- 32 new clients
- Growth of 12.2% in their Top 10 clients which contribute to 27.5% of total revenues – Going deeper within existing clients
- Stabilization in pricing. Pricing up 1.1%
- Growth in BFSI, Energy,
- Manufacturing,Telecom, flat
- Retail lagging
- Growth in US geographies, Europe still lagging
- Net addition of 4,429 people this Quarter
- Total employee strength 109,882
- Attrition at 11.6%
- Plans to hire 6000 people in Q4 FY10, total hire for FY10 24,000. This is higher than 20,000 projected last quarter
- Infosys BPO total strength 16,874, net addition 841
- Setup Infosys Public Services Ltd in the US with a capital base of $ 5 million to pursue Federal/State Government deals in the US
- 119 of the Fortune 500 companies are clients of infosys
- McCamish Acquisition added 1.9 million in revenue for BPO this quarter,Q4 expected to be $7 million contribution
- Introduced Flypp – platform for app store for small to medium sized telecom service provider
- Infosys Consulting and China subsidiaries profitable. China operations servicing non-domestic market primarily.
- 1,600 people in China
METRICS
- Revenues – $1.232 billion QoQ – (+6.8%), YoY – (+5.8%)
- Net Income – $334 million QoQ – (+5.4%), YoY – (+.6%)
- Fiscal Year 2010 ( ending March 2010) Guidance – $4.75 – $4.76 billion, YoY growth 1.8% to 2.0%
- 3.1 billion dollars in cash
- Revenue break up – North America – 66.6%, Europe – 21.9%, India – 1.2%
- Application Development – 42.3%, BPM – 5.9%, Consulting Services and Package Implementation – 23.3%, Infrastructure Service – 7.1%
- Insurance,Banking – 34.6%, Manufacturing – 19.3%,Retail -13.1%, Telecom -16.2%, Energy & Utilities – 6.1%
LEARNINGS
- US markets are and will continue to be key drivers for growth for outsourcing vendors.
- Some of the large vendors like Infosys are leveraging their innovation and the market changes to offer services and products which fit the new paradigm. New pricing models, building platforms like Flypp are some of the product innovations coming from Indian vendors.
- Financial services firms continue to be the drivers for growth for outsourcing vendors. With the industry maturing and a number of financial firms busy with risk management, regulatory, M&A activities are leveraging outsourcing providers to manage cost and create services.
- Cost reduction and cost management continues to be the number one reason driving offshoring activities.
- Cloud competing still lagging in the developed countries. Infosys sees emerging countries leapfrogging and adopting cloud computing earlier.
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